Advanced Accounting

Advanced Accounting Course Code 444

Q.No.1. Mr.zahid and mr. akbar were participants in a joint venture , sharing

profits and losses in the proportion of 2/3 and 1/3 respectively.Each party

maintain a complete record in his books. Mr. zahid supplies goods to the value

of Rs.35,000 and incurs expenditure of Rs. 1600 on them and Muhammad

akbar supplies goods to the extent of Rs. 22,000 and his expenses amounted to

Rs. 1900. Mr.zahid sells all his goods for Rs.68,000 for which he is entitled to

receive a commission of 5% . accounts are settled by bank draft. Required: give

the necessary journal entries and the ledger accounts in the books of Mr. Zahid

to record the above transactions.

Answer:

Journal Entries:

1. To record the supply of goods and expenses incurred by Mr. Zahid:

Joint Venture Account Dr 36,600

To Goods Supplier (Zahid) Account 35,000

To Bank Account 1,600

2. To record the supply of goods and expenses incurred by Mr. Akbar:

Joint Venture Account Dr 23,900

To Goods supplier (Akbar) Account 22,000

To Bank Account 1,900

3. To record the sales proceeds by Mr. Zahid:

Bank account Dr 68,000

To Joint Venture Account 68,000

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